Quick service is the densest equipment-per-square-foot building in commercial real estate. A 2,400 square foot box can carry a full commercial kitchen, a drive-thru system, a canopy and a site engineered for stacking a dozen cars, and almost all of that is short-life property.
The signature fact: the drive-thru is a system, not a window. The order point, menu boards, speaker post, timing system, headsets, presenter and the vehicle detection loops are equipment. The lane itself, its striping, the bypass and the escape lane are 15-year site work. The building opening the window sits in is structure. QSR studies land at the top of the retail range because those three groups are all present at once and only the third stays long-life.
What reclassifies in a QSR
5-year personal property (Section 1245)
- Kitchen equipment: fryers, grills, holding units, walk-ins, prep tables and beverage systems
- Exhaust hoods, make-up air dedicated to the cook line, and fire suppression serving the hood
- Drive-thru systems: order point, menu boards, speakers, timers, headsets and detection loops
- Dining-room furnishings, decorative and display lighting, interior signage and menu displays
- POS, back-office IT, security, CCTV, digital signage and audio
- Dedicated branch circuits and connections serving identifiable kitchen equipment
15-year land improvements (Section 1250)
- Drive-thru lane paving, striping, bypass and escape lanes, and directional islands
- Parking, curbing, bollards, sidewalks and patio hardscape
- Site and lot lighting, pylon and monument sign structures, preview-board foundations
- Landscaping, irrigation, drainage and trash enclosures
39-year structural (Section 1250)
- Shell, roof, structural framing, drive-thru window opening and storefront
- Building canopy where it is structurally integral, base HVAC, electrical service, general lighting
- Building fire protection, restrooms and standard interior finishes
- In-slab plumbing and grease-waste piping below the floor
Two things that move the number
Turnkey versus shell purchase. If the equipment package came with the property, the accelerated share sits near the top of the range. If you bought a shell and installed your own equipment, that equipment is already on your schedule and the study covers the building and site instead. Both are legitimate; they produce very different percentages from the same building.
Grease waste. The interceptor and the piping to it are frequently assumed to be equipment. Below-slab grease waste is generally building. The interceptor itself is evaluated on its own facts, including whether it is an in-ground structure or a unit.
Illustrative, modeled
On a $2.4M QSR property with roughly $2.0M of depreciable basis, purchased turnkey with equipment in place, an accelerated share near 35% moves about $700,000 into short-life pools. This is a modeled figure rather than a completed client study.
Cost Seg Smart produces QSR studies on the restaurant component library with engineer review of the drive-thru and site work. Fees are published at costsegsmart.com.
FAQ
Is the drive-thru canopy 15-year or 39-year property?
It depends on how it is built. A freestanding canopy over the lane behaves like site work; a canopy framed into the building is generally part of the structure. The structural drawings answer it, and the answer changes with the prototype.
We are a franchisee on a ground lease. Is there anything to study?
Yes, on what you built and own. A ground-lease build is your improvement, and the equipment and site work you paid for are exactly what a study addresses. The lease term also interacts with how improvements are recovered, which is worth raising with your CPA early.
Does a remodel qualify?
A remodel is its own placed-in-service event with its own basis, and it is often a good candidate precisely because remodels concentrate equipment and finishes. What it should not do is silently overlap with assets still on your schedule from the original build; a partial disposition analysis is the tool for that, and it belongs to your CPA.